Norway needs to overcome its risk aversion and allow the country’s $900 billion sovereign wealth fund to invest in unlisted infrastructure, including renewable energy projects, according to a new report.

The fund should be freed to invest 5 percent of its capital in such assets, which the investor itself has lobbied for, the Institute for Energy Economics and Financial Analysis said in a report. Based on the experience from the best-managed investors in the industry, returns could be 12 percent to 15 percent annually, according to the report.

The report was presented Wednesday in a closed session to Norwegian lawmakers as part of a long-running debate over whether to open the fund up for infrastructure investments to boost returns that have been lagging targets amid record-low global interest rates. The Conservative-led government last year rejected pleas from the central bank, which manages the fund, to allow it to add that asset class, arguing regulatory and other risks were too high. But opposition lawmakers forced it to pursue the review of infrastructure and present findings in a white paper due in the next months.

“There are real funds that are investing real money that manage this risk,” Tom Sanzillo, the IEEFA’s director of finance and one of the authors of the report, said in an interview in Oslo on Tuesday. “And they’ve found a way to achieve returns that I think would be attractive for the Norwegian fund.”

The IEFFA’s report strengthens the case for investments in unlisted infrastructure, Torstein Tvedt Solberg, a member of parliament for the Labor Party, Norway’s biggest opposition group, said after attending the presentation. Still, it was difficult to know when this may happen, given the uncertainty related to the content of the upcoming white paper, he said.

The Finance Ministry couldn’t immediately comment on the report or the white paper.

The IEEFA’s report listed five recommendations for the fund, including the 5 percent share in unlisted infrastructure, investment partnerships with established funds and hiring staff with expertise in the field.

Bigger Market

One of the Norwegian government’s misgivings — that the market for unlisted infrastructure is too small for the fund — is already “dated,” Sanzillo said.

At more than $1.1 trillion, it’s about double what the government estimated last year, if not more, he said. The median internal rate of return for all infrastructure assets is about 10 percent, and renewable-energy assets have helped managers reach returns of as much as 15 percent, according to the report, which includes case studies of investors such as Brookfield Asset Management Inc.

Political, regulatory and financial risk, which the government argued were even bigger in renewable-energy and emerging-market projects than other infrastructure, can also be handled, Sanzillo said. “The renewables market is actually in a growth phase, and so if it does have hiccups, it’s capable of recovery,” he said.

The fund, the world’s biggest of its kind, has been lobbying to expand its mandate beyond stocks, bonds and real estate and proposed in December 2015 to invest as much as 5 percent in infrastructure. It said at the end of last year that a move into unlisted infrastructure would be regulated the same way as its real estate investments and restricted to developed nations. The fund was freed in 2010 to invest in real estate and it has since built a $20 billion portfolio of high-profile properties from Paris to London and New York.

The report was partially financed by the European Climate Foundation. The Cleveland-based IEEFA does research and analyzes financial and economic issues related to energy and the environment. Its stated mission is to speed up the transition to a diverse, sustainable and profitable energy economy and cut the dependence on coal and other non-renewable energy resources.